Coronavirus in Australia: NRMA accuses petrol retailers of failing to pass on fall in wholesale price
Drivers are paying as much as 60c too much for petrol and Australians aren’t going to put up with paying top dollar while oil global prices plummet.
The global price of oil is in free fall, yet prices at the pump in Australia are still ridiculously high, a consumer group has said.
The difference between the wholesale price of fuel and the price consumers are being charged is 60 cents a litre in some cases.
“Prices must fall immediately,” New South Wales motoring organisation the NRMA said today.
It said the wholesale price for unleaded fuel in Sydney was just $1 a litre.
Yet, a look at the Fuel Check price comparison website has shown a BP service station on the busy Parramatta Rd in the inner-city suburb of Camperdown was selling fuel for more than $1.65 per litre.
Just a few kilometres down the same road, at the independent Speedway garage in Five Dock, unleaded was at 113.9 per litre.
The NRMA said the average fuel price in the city was $1.40 a litre.
“Almost one-in-three service stations are currently charging fuel at 60c per litre higher than the wholesale price,” said NRMA spokesman Peter Khoury.
“That Australians are doing it tough right now is an understatement of global proportions. The one place families should be able to look to for some budget relief is at the bowser because there is lots of fuel on the market and it should be very cheap.”
The NRMA said the gap between the wholesale and retail price was now the “highest on record”.
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A common grumble of fuel retailers is that they are fast to raise prices if the wholesale figure goes up; but slow to reduce them.
World oil prices have been on the decline for some time.
There are two main benchmarks for the global oil price — West Texas and Brent Crude.
On Wednesday, the price of US West Texas intermediate crude fell to just $US20.37 ($36.60) per barrel. That’s its lowest level since February 2002.
Meanwhile, the price of Brent Crude, was down to its lowest level since 2003.
The fall in the global oil price is being driven by a number of factors. Unsurprisingly, coronavirus is right up there with the near cessation of international air travel leaving a huge hole in the market.
At the same time, Saudi Arabia and Russia have ratcheted up production inundating the market with oil it just doesn’t need right now.
“The oil market is about to flood with surplus barrels,” Bank of America said to its clients on Wednesday, US news site CNBC reported.
Some of the cheapest fuel in Sydney is the Apex Petroleum station in Villawood in the city’s southwest. This afternoon, it was selling unleaded at just 95.9c per litre.
But the NRMA said it was one of the few exceptions. The problem was worse in many regional communities, it said, where petrol stations were thinner on the ground.
“It’s not clear whether the oil companies thought the community would not notice what is going on at the bowser but what is clear is that the public is in no mood for this rubbish – petrol prices must fall immediately,” Mr Khoury said.
“The NRMA could not be more blunt about this – oil companies must drop their prices now.”
The Australian petrol market was once dominated by so-called refiner-wholesalers that produced and sold their own fuel.
That included firms like Caltex and BP.
However, nowadays, most retail fuel sellers buy their fuel from a wholesaler. So, Coles’ stations stock fuel sold by Viva Energy which has the licence for the Shell brand and products in Australia.
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The biggest fuel retailers in Australia are Coles, BP, Caltex, Viva Energy and UK-based EG Group which operates Woolworths branded stations.
A quarter of the market, and rising, is in independent hands, with 7-Eleven and United two of the largest names in the category.
News.com.au has contacted BP and 7-Eleven for comment.
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